Retirement
‘Scope’ to move towards a Future Fund-style super: Grattan fellow
There is “scope” to move down the path of a Future Fund-style government super scheme, a Grattan Institute fellow has said, citing the lack of competition in the sector.
‘Scope’ to move towards a Future Fund-style super: Grattan fellow
There is “scope” to move down the path of a Future Fund-style government super scheme, a Grattan Institute fellow has said, citing the lack of competition in the sector.
Speaking to Nest Egg in the wake of the Productivity Commission’s explosive report on the superannuation sector, the Grattan Institute’s Brendan Coates said the findings were “damning” but there were also a number of surprising recommendations, and omissions.
“The one thing that the Productivity Commission did not recommend was a government superannuation fund to provide competition,” he said, noting Peter Costello’s suggestion last year that the Australian sovereign wealth fund, the Future Fund, could also manage superannuation savings.
The Productivity Commission’s recommendations included new workforce entrants choosing from a top 10 list of super funds, as well as deciding whether to have insurance tacked on.
“I think [the Productivity Commission’s] essential approach for now is to now certainly to look at trying to squeeze margins, squeeze fees by getting more competition, by getting people to make better choices and makes funds work really hard to become one of those essentially top ten funds that are going to be listed on the ATO’s website,” Mr Coates said.
However, should these recommendations fail to boost competition, there is “scope … to move down that [government superannuation scheme] path”.
The director of Hewison Private Wealth, Nathan Lear, added that there could be merit in a low-fee, Future Fund-style super scheme for vulnerable workers.
He told Nest Egg, “The Future Fund is a pretty high-quality fund in terms of the investments in there and if there was a way for the government to subsidise that, perhaps with low fees for consumers, potentially that could have merit because often that's when people are most vulnerable when they've got those smaller balances and there's for example, account keeping fees and they're going to be the same in some cases regardless of your balances.
“Quite often the investment fees are tied to a percentage based fee so that should be fair, no matter how much you've got but often it's other fees like account keeping fees and you know, insurance and things like that so I think it's potentially got merit.”
However, economist and managing director Market Economics, Stephen Koukoulas, has a different take, tweeting in early June:
Utterly freakish notions doing the rounds of putting superannuation into a few funds or even just the Future Fund.
— Stephen Koukoulas (@TheKouk) June 2, 2018
Shows a lack of awareness of concept of too big to fail, liquidity & the issues which drove the 2008 financial crisis
Let's hope these whacky ideas die a quick death
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more